Question

Apple Inc.'s decision to acquire Beats Electronics and Beats Music in 2014 for $3 billion rather than enter into a joint venture with that company was an attractive strategy option for entering a promising new industry in headphones and streaming music services because it

A. was an effective way to hurdle entry barriers, was quicker than trying to launch a brand-new start-up or joint venture operation, and allowed Apple Inc. to move directly to the task of building a strong position in the target industry.
B. offered Apple Inc. the prospect of gaining an immediate competitive advantage in the new industry and thus helps ensure that the diversification move could pass the competitive advantage test for building shareholder value.
C. was less expensive for Apple Inc. than launching a new start-up operation, thus passing the cost-of-entry test.
D. was more likely to result in Apple Inc.'s passing the shareholder value test, the profitability test, and the better-off test.
E. would have entailed divulging sources of competitive advantage such as trade secrets, confidential financial information, and proprietary processes that Apple is unwilling or unable to share.

Answer 1

A. was an effective way to hurdle entry barriers, was quicker than trying to launch a brand-new start-up or joint venture operation, and allowed Apple Inc. to move directly to the task of building a strong position in the target industry.

Step-by-step explanation:

1. Was an effective way to hurdle entry barriers

There are some entry barriers that need to be crossed before entering some industry like electronic new industry in headphones and streaming music services. For example, already existing firms might patent or copyright for their intellectual property which may require Apple Inc. to its own technology or wait for some years before entering.

2. Was quicker than trying to launch a brand-new start-up or joint venture operation.

Just like one above, acquiring Beats Electronics and Beats Music in 2014 by Apple Inc. saved it from all hurdles from entry barriers or having wait for some to sort bureaucracies of launching a brand-new start-up or joint venture operation.

3. and allowed Apple Inc. to move directly to the task of building a strong position in the target industry.

Since the entry barriers had already being crossed and the bureaucracies of launching a brand-new start-up or joint venture operation have been avoided by acquiring Beats Electronics and Beats Music, this gave Apple Inc. to move directly to the task of building a strong position in the target industry without any further delay.